tv Power Lunch CNBC November 12, 2013 1:00pm-2:01pm EST
on that note, as the loser, simon, make your final trade. >> well, i'm not going to deal with the housing stock. cme group. >> quickly, joe. >> moreup side in rig. >> pfizer beasting to break out. >> quickly weiss. >> ubf short bonds. >> "power lunch" starts right now. >> "halftime's" over. the second half of your trading day begins now. >> scott, thank you very much. biggest names in business have been talking at one serious po power conference all day long and it is only on cnbc. on the list and makes news today, dan loeb, barry diller, ken griffin and elon musk. that's a musk shot right there. oil in the usa, watch out saudi arabia the u.s. is expected to overtake you in oil production faster than anyone thought. so what? so a lot. from pump prices falling to jobs to politics, full coverage of that ahead.
a half a billion dollars of very special art up for grabs tonight at christie's. this is one of the pieces on the block. it is warhol's black and white classic coca-cola bottle. we'll take you inside the world of the auction. first to sue at the nyse. >> hi, ty. good to see you. we have big names in the airline sector that's moving the transports as well which are up about 30 points on the day. here's dom with the details. hey. >> thanks, sue. we're finally going to see a merger between amr and u.s. airways going to create the biggest airline. the two carriers said they reached an agreement with the justice department as well as state attorneys general to allow a deal to happen. u.s. airways stock turned negative after being halted on this news. as part of the accord american and u.s. air will give up key facilities and capacity at seven airports in order to facilitate more industry-wide competition. the gates and slots will go to low-cost carriers in seven key
airports including boston logan, chicago o'hare, dallas love field, l.a.x., miami, new york, laguardia and reagan national in washington, d.c. as a result of this compromise, both companies expect a merger completion by next month. amr's tom horton will become chairman, u.s. airways doug parker will be the ceo. stock is up on the news. other airline stocks higher as well, delta, united, jet blue, southwest, all flying high. >> thank you very much, dominic. watch out saudi arabia, the u.s. is on track to become the world's top oil producer. the international energy agency, the iea says the u.s. will overtake saudi arabia and russia to become the world's top producer of crude by 2016 bringing the u.s. closer and closer to energy independence. crude oil down more than 7% over the past month with the prices at the pump also heading lower. joining us now two cnbc contributors, addison armstrong and jeff kilburg.
addison, let's start with you, on your mid and longer term view of where oil will trade? >> well, you know, we think that in the mid term, you know, starting beginning of next year, we're looking at a really stable environment fors u.s. oil prices. you know, demand is still going to be somewhat impacted by the state of the economic recovery. we're obviously producing much more than we ever thought we would, 7.9 million barrels a day at last count, and i think we're in for a period of stability, ranging from 90 to $100 a barrel. >> sue? >> let's it turn to how you play this and for that we have jeff kilburg to talk about it. what are the best ways to play oil right now? what's your perspective on where prices are going, jeff? >> well, sue, the prices of oil and gas, this is fracking awesome, sue. this is such a boost in middle america and we actually see the prices going lower. you know, right now we look at the high in crude oil, back
august 28th, it was $109.70. we're down about 15%. before we can label this, sue, as a bear market we need 20% correction. we got to trade $88. honestly in the last 31 years, excuse me since 1983, we've seen 31 bear markets. the average downturn in that is 33%. we could see a lot lower. we like to trade the futures markets but also you can trade the et it f. sco. that's a double levered etf that gives you explow sure to crude going lower. >> it's a double short. >> a double short. called an ultrashort. allows you to play this move down because it's about supply and demand. >> addison, i got to get you in here, man. your friend over there is taking a double levered short on oil. >> yeah. >> that's pretty fast company for me, kilburg. addison, what do you think, man? >> you better have a pretty tight stop if you're going to
play it that way. we still have a lot of -- it's overstated, but we have a lot of geopolitical risk. if this situation with iran doesn't work out, you know, there's another round of talks coming up, everybody is really happy about this, they think that, you know, we're going to really come out of the back end of this and we're going to have a oil on the global market as a result. we don't have that certainty right now. i think all it takes is one surprise like that on the geopolitical front in the market. >> addison, i agree with du. >> short sounds like a drink at starbucks to me. >> really good cocktail. >> that's nothing. that's nothing. addison, you have a great point. in the event we see iran come to some resolution, you will see a quick, fast 10% drop in the price of crude. we like this etf here in the windy city, ty. >> well, i would agree that you definitely see if there is a resolution in iran, a real concrete resolution, then i
think you do see a nice 10% drop. >> jeff, what if, indeed, things do change, though, as adson suggests? how would you play oil on the long side? >> well, again, we flip our position and go long and uso is the etf folks can get in there. we like these features, keeping stops, controlling our risk. we saw syria, libya, iran, it's really gone to the background so right now, it looks like prices want to continue to go lower. test that 20% bear correction territory. $88. >> all right. gentlemen, thank you very much. addison and jeff. >> we have breaking news in the bond market. the three-year note auction up for bid today. rick santelli tracking the action at the cme. >> the grade a b-plus. and i don't think it should come as a surprise, short maturities are popular, we're in a curve steepening mode. 30 billion threes auctioned about a handful of minutes ago.
the bid to cover at 3.46 was better than 3.32 and the best in seven months. indirect solid at 33, a bit above their ten auction average. directs at 19.4. same could be said. the yield.6444. so basically 4s are wild. the bid side 64.5 for the wi. solid pricing and metrics and solidly interested how the long maturities look starting tomorrow with tens followed by 30s. b-plus, sue and the gang, back to you. >> thanks so much, rick. >> to dominic chu who has a market flash for us. >> that's right. tesla is taking a hit now. this as rumors circulate that its model s calls will be recalled due to a series of fires. we want to point out it's just rumors. no investigation is happening on that front. no real news there. just the idea that there's a possibility has sent those areas lower. back over to you. >> thank you very much. day four of the aftermath of that deadly super typhoon that
hit the philippines and from around the world now, aid is pouring in. the u.s. sending a navy ship to the region. nbc's ian williams live in manila with the latest aid efforts. you're reporting the death toll is being revised lower now thankfully. take it away. >> that's right, tyler. in an interview a little earlier this evening, president aquino said he doesn't expect the death toll now to be above 2,500. he said the confirmed figures they have so far below 2,000, but he gave the expected figure as 2,500. he said the original figure which had been given last weekend of 10,000 had come from what he described an emotional local official in the immediate aftermath of the typhoon. that's, of course, very, very welcomed news, although aid agencies have also been warning that figure may rise very, very sharply and i guess we're only
going to know for sure when rescue teams arrive at some of those outlying areas, many of which they still have not got a clear idea about, tyler. >> ian, thank you very much. what is the insurance cost of this devastation, preliminary numbers from the risk model echo cat estimates that insured lo losslos losses will be less than $100 million. insurance penetration in the philippines is low. most don't have it. the economic damages will be far far greater and the personally born costs obviously much higher as well. sue? >> indeed, ty, you're right there. are you looking for a deal in this market? we have the best cash rich stocks right now. plus, walmart is turning up the heat in the race to black friday. say it ain't so, courtney. >> oh, but it is, sue. the largest retailer joining competitors trying to become part of america's annual thanksgiving day traditions. dinner football and shopping. is that what the pilgrims
intended? the details of walmart's turkey day plans coming up on "power lunch." [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account.
welcome back to "power lunch." check out shares of vonda pharmaceuticals. surging in heavy trading after an fda pam said its sleep disorder drug for the blind is safe and effective and warns approval. keep in mind the market cap is around $335 million so on the smaller end but still one stock to pay attention to, back over to you. >> dom, thank you. there is a big power summit in
new york. ceos and many of wall street's top investors sounding off on the economy, the markets and a whole lot more at new york's times deal book conference. cnbc is the exclusive broadcaster of that event. kate kelly is there live with highlights of fascinating conversations. kate? >> thanks so much, sue. i would say that within the last hour or so, things have taken a decidedly more bearish tone in terms of the global economy, especially leading off with blackrock ceo lawrence fink. fink talked about a number of issues, among other things wants the fed to start tapering as soon as december and predicted a significant leg down in the coming months and emerging markets, 12 to 15%. he expressed concerns as well about what's going on in various economies around europe. let's take a quick listen to that. >> there's greater and greater pressure on the french government today to create some
reforms. just downgraded. i don't think in ten year's time we're going to have a euro if we don't have a strong france and germany. it's predicated on two very strong currencies and the competitiveness of france is still deteriorating. >> in the view of fink, the future of the euro hangs still much in the balance. that echoed a little bit what we heard from ray of bridgewater associates earlier. he had an audience question about france and talked about the heavy load imposed by debt service payments that france is facing and he said he thinks all of that big picture puts it on par with southern europe in terms of its economic stability right now. tough words right there. one other thing i should mention again, dan loeb in an exclusive interview with andrew ross sorkin talked about a number of issues but a surprise disclosure given strength to the market is his fedex long which he disclosed for the first time and he says he's a fan of management led by ceo fred smith.
we saw an uptick on that. as well, he's still bullish on japan in general led by the prime minister abe's program and sony in particular a stock he's had trouble with in terms of his activist efforts, but at the same time he the thinks it's a longer game and the company is embracing some of his ideas including a push for greater accountability. >> all right. kate, thank you very much. kate kelly reporting from the deal book conference in new york city. holiday central. walmart turning up the heat on black friday shopping. the biggest retailer joining the growing race to open early on thanksgiving. courtney reagan here with the details a little bit of a change for walmart. >> it is a change, but really hard to be surprised. once one retailer starts they all follow. the christmas creep begins because it works. walmart opening 4700 stores in the u.s. at 6:00 p.m. on thanksgiving. that's two hours earlier than last year, but toys r us opening
the earliest at 5:00 p.m., three hours earlier than in 2012. best buy joins walmart with the 6:00 p.m. start. target, kohl's, macy's, jc penney among those opening thursday and staying open until late black friday night. walmart will feature on-line deals and stagger deals throughout the night into friday and offer 2 1 items at the one hour guarantee. certainly not everyone loves the idea of thanksgiving shopping hours but many do. turkey day hours have moved from an experiment to an annual tradition because shoppers show up. thanksgiving day shoppers do tend to be younger. the national retail federation says the average age of shoppers increases as the weekend progresses. so retailers will target different age groups with those progressive door busters to shows most likely to shop at the various times throughout the weekend. most think thanksgiving hours shift the timing of the sales rather than add to the total but competition for those shopper
dollars has never been tighter so retailers will do whatever it takes, whenever it takes it, to win those sales. sue? >> thank you very much, courtney. no housing, and earnings from one of the biggest home builders and new data on mortgages. diana olick joining us from washington with that part of the story. hi, diana. >> hi, sue. dr horton results were mixed along expectations but there were some warning signs as well. take a look. earnings per share came in at 40 cents. revenues up 39%. gross margins beat and analysts like that. on orders of just 14% in dollar volume, but down 2% in actual houses sold. that's because the builder is focusing more on the move up price home, the entry level arena is very, very quiet. also a red flag on the cancellation rate at 31%. dr horton is generally an entry level builder, so this move on the focus, moving to those higher end homes is very telling. we're hearing mumblings of
possible builder concessions. i want to take a quick look as we turn to mortgages. mortgage delinquencies dropped 23% in q3 to 4.09%, from transunion. it's down 4% on the quarter and this is the seventh straight quarterly decline. the drop is nationwide, but some of the formerly hardest hit states, california, arizona and nevada, are seeing drops of 30 plus percent in borrowers making late payments. the rate is still historically high, but improving. tight underwriting has helped as have rising home prices. mortgage volume, though, is falling and that may mean more nonprime borrowers could get more attention from the banks because the banks want more business. the mortgage bankers today reported that credit availability increased slightly in october, after declining for two straight months. they say some lenders reduced minimum credit scores on certain products. of course more on-line. realtycheck.cnbc. >> top cash rich stocks in this
market. we've run screens and have the names for you. plus with stocks sitting at record highs we'll tell you where the rich are investing in this market right now. all that and more when we return after these short breaks. on "power lunch." americans take care of business. they always have. they always will.
that's why you take charge of your future. your retirement. ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one. to help you retire your way... with confidence. that's what ameriprise financial does. that's what they can do with you. ameriprise financial. more within reach.
that's what they can do maestro of project management. baron of the build-out. you need a permit... to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro. i got this. [thinking] is it that time? the son picks up the check? [thinking] i'm still working. he's retired. i hope he's saving. i hope he saved enough. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. whether you're just starting your 401(k) or you are ready for retirement, we'll help you get there.
welcome back to "power lunch." check out shares of glaxosmithkli glaxosmithkline. the drug was designed to prevent heart attacks and strokes in a completely different way from cholesterol lowering statin drugs. what these drugs do is a target enzymes linked to plaque. overall shares down. >> thank you. momentum concept, rate haters, defensive, all of those groups of stocks we love to talk about as the debate rages on as to whether a pullback is in store. what about good old fashioned cash. we screened the s&p 500 for cash rich names and sheila dharmarajan is here with some of those names for us. hi, sheila. >> hey there, sue. you know that old saying cash is king and companies with a lot of cash, well they could be well positioned to ride out any bumpy times ahead. with that in mind we screen the s&p 500 for crash rich companies, companies with a lot of cash in the banks, little
debt, good free cash flow yields, solid dividend and good returns. only six names made the list. here they are. so first up is sandis, the chipmaker, free cash yield of 17%. intuit the software maker. nike, the athletic apparel company. also logistics company, expe dieders t erers international. accenture and t roe price rounding out the list. you have flexibility and optionalty to ride out bumpy times ahead or if you think the market may be pulling back. we took a look at the valuations of this group, forward pe about 19 times. a little more expensive than the market, but keep in mind you are getting a dividend. finally got to talk about returns because that's what everyone cares about. four out of these six names actually posted 20% in gains year to date. cash rich may be the way to go.
tyler, to you. >> thanks very much. the dow off as investors shift their attention to the fed. can the market continue to move up with what's left of this year? joining us are alan reed, ceo of forward and david bailen, global head of managed investments at citi private bank. welcome to you both. alan, since you're here i'm going to begin with you. how do you answer that question? do you expect that market will end higher than it is now and what are the odds of a serious pullback over let's say the next six months? >> tyler, we look at the marketplace and it's been really strong, so we're not going to fight the tape if you will but we're seeing people move from growth stocks to value, as we saw last week. movements really from high pes to low pes. last night's football game, tampa bay, wanted to win, right, is protect offense. grab the ball, jump on it, let the clock run out. so that's really what we're seeing as we go through the end of the year. couple things we're worried about, of course, is like everybody else, the big taper word. you know, you can think about it
as we bring in yellen. yellen is a new, if you will, new person with her finger on the button and the trigger puller if you will. the challenge is how is yellen going to do and test her. >> how will it react if it does ultimately start to taper. >> the last two have really been tested so when greenspan came in, what year was it? '87. bernanke, '08. the market isn't necessarily always friendly to the new entrant in that top job. we'll see. we certainly see. there's volatility to come. we're not expecting huge pull downs, but 7 to 10%, a possibility. >> david. let me turn to you and ask you whether you think the market -- let's assume that the fed begins to pull back its bond purchases or taper. either in december, maybe in january, overhe next four or five months. do you think the market is so dependent on that artificial medhi sin in the brew here it
will run out of steam because of the taper? >> there's no doubt that the fact that the fed didn't follow through last time is going to create a degree of volatility when they finally do act. the fact that we don't really know what they were going to do or what they're going to do or when they're going to do it is indicative of the fact when they do it's going to be much more volatile. in 2013 every time we've had bad news from the sequester to the government shouldedown, the amount that market went down in the period of uncertainty became smaller and smaller. indicating people had more and more confidence. when the fed acts they're going to have their first dose of reality which is that the fed is not going to be the buffer for ever more. that's going to affect emerging markets, it's going to affect the rate of the ascendsy of the market here and i think yes, it's going to add to volatility and uncertainty. it's going to drive interest rates materially higher. >> david, give me ideas for smart investments for let's say over the next six months to a year. if i had some fresh cash that i wanted to deploy here as we get close to year end, let's say
i've got $100,000 to put to work. where would you say a couple good choices would be? >> i think alan has hit upon it. you have to be careful about vallations. you want to be in the domestic stock market and in value oriented stocks. you want to be in stocks cash rich, buying back shares, increasing their dividend and increasing their earnings. you want to be in bonds in general and not bond funds because by owning the bonds you get the yield to maturity and not suffer the losses of holding bond funds and adding alternative investments not with $100,000 necessarily but increased hedge fund exposure but liquidedy. it's a good time to put money to work but you will not see another 27% equity rise in 2014 as you did in america in 2013. >> alan nodding his head and chuckling with confidence david you're correct on that. react to what david just said. he says domestic stocks, value oriented stocks which seems to
be where you are, he says bonds, the straight bonds, not the bond funds, react. >> bond fund guy. bond funds. but only certain kindses. >> what kinds? >> we have a credit long short fund. long munis and allow for the portfolio manager to hedge their interest rate. who better than pimco to run the portfolio. veteran joe dean starting -- >> if you're going to do a bond fund you would recommend one that has the ability to hedge against rising interest rates. >> absolutely. >> another area you mentioned to me off-line was the so-called frontier markets. now you've got to have some fortitude let's say to invest in nigeria or balukastan. >> if you think back a couple years ago, back 10, 20 years ago, emerging markets who would have put their money there. that's where the low valuations were and growth rates arep. we see it today. think about the u.s. in general
think about the market cap, about $16 trillion, just happens to be about equal to our gdp. frontier markets are trading about -- their markets are worth about 3.5% of their entire gdp. emerging markets 16%. >> that's the value -- >> very highly valued. >> obviously a value compared with developing markets as well. thank you very much. david, thank you. you agree on some things, disagree on bonds versus bond funds but that's what we like to hear. >> thanks for inviting me. >> appreciate it. sue, down to you. >> take a look at the gold market. gold prices are closing now and we have some pressure almost all the way through the precious metals and industrial metal complex in today's trading session. the gold market down about $9, almost $10 on the trading session but silver and copper are lower and we should note that the oil market under pressure. so many of the major commodities markets under some pressure in today's trading session. let's check the interest rate front because that obviously plays into things as well.
to the bond market, rick santelli tracking the action at the cme. hi, rick. >> hi, sue. you're indeed correct. i think fixed income markets are at the epicenter of most conversations of late as rates have been moving higher after friday's job report. intraday of three, had an auction, b-plus auction, short maturities are back in the sell camp just a little bit today. a flatpenning curve today. but steepening has been the real cycle of late. you can see fives move out, the 30s jumps out at you, close to up changed. if we look at the pound versus the dollar, over the last couple of months, what jumps out at you we are below the 160 level. it's the dog currency today, the weakest against the dollar, even though the euro is weak as well, the european currencies went from golden to sold pretty darn quick. sue, back to you. >> all right. thank you so much, rick. well new york's 1 world trade center is the tallest building in america.
knocking out chicago's willis tower. knocking it right off of its pedestal. international panel of architects saying the needle on top of the skyscraper down the street from us here can indeed be counted. one measuring the building's total height. with the needle 1 world trade center stands at a symbolic height of 1,776 feet. without it, the building would have only been 1,368 feet tall, well short of the 1,451 foot willis tower. it ty, i'm kind of betting had this isn't over yet. >> i'm 6'2" when i wear my cowboy boots. >> you should see me in my 5 inch stilettos, baby. >> oh, and i have. all right. the retail race to open early on black friday, will it back fire. the profits, marcus lamownous will join us on his take and it is being called the art ax auction of the century.
it's time for the power rundown with marcus host of cnbc's series "the profit" and ceo of camping world. great to see you again. >> you as well. >> wonderful to have you here. we have a lot to talk about. we're going to start out with this morning on "squawk box," barry diller on and made some comments to andrew ross sorkin at the deal book conference this morning about twitter's ipo and its early investors. let's take a listen. >> of course it isn't. will it be in the year 2175? maybe. i don't know. twitter is only a good investment for those people who got in early wholesale. and by the way, the only people -- nobody is investing in twitter. nobody does invest in these companies at this stage of their
lives. they're looking to score. >> what do you think of that? >> i disagree. >> you disagree? >> i disagree for one reason, you have a great management team and a lot of smart people. they'll figure out how to monetize the millions of users. we did the twitter effect here, twitter revolution, carl did. >> twitter revolution. >> the people will be sorely mistaken five years from now. i bet ten years ago they thought gook google was a waste of time. >> a certain amount of flipping in any ipo certainly as high as one profile as this. this one does feel somewhat different and maybe that's because the users are so invested, no pun intended. >> and they're loyal. >> and they're very loyal in the product it itself which may be different. >> i tell you one of the things people aren't counting on in my camping world business i use twitter and their advertising forums. i think they will figure out how to monetize it. >> second topic which is on the heels of macy's, target and best buy, walmart has moved up its
black friday openings to thanksgiving. is this the best way to get a jump on holiday shopping or is it going to backfire? because thanksgiving is the family holiday, you don't have to give presents, you do the big meal and then you just sit and relax. >> i think there's going to be pressure on the household to leave early but with six less shopping days this year the retailers were forced to do something different. >> so it's a function of the calendar. >> i think so. six less shopping days. trying to pull it forward a little bit. some cases it's only two hours. i think we're making a little bigger deal than it is. i want to see the first man that tries to get up from the table two hours early and not clean the table, it's going to be an interesting -- >> that will be interesting. >> do you do a lot of business at camping world the day after thanksgiving? >> we don't. my christmas season is the summer. i'm battening down the hatches. i go out in shop and standing in line trying to get the good deal myself. >> you are? >> i have to be honest. >> i think i'm a little disappointed, but that's okay. >> don't be disappointed.
everybody needs a bargain. i need to save money. >> that's the way it works. you have the money to ploy to all these businesses. a trade report says small business optimism dropped after the government shutdown. you run a business yourself. camping world. a large business. but what do you get from the people, what sense do you get from the people you talk to who maybe have smaller businesses than yours? >> sue, i wish we could figure out a way to communicate to these small business owners and educate them it's not as dark and gloomy. the sba does a nice job, kind of, lending to this community, but no one is educating them and inspiring them. when we created the show and cnbc decided to get into small business this is one of the reasons. the sentiment is bad but i don't think it's as bad as what's really happening. i want to be the voice of those people saying it's okay. get focused, get back to the basics, put your head down, don't worry about what other people are doing. >> it's going to be okay. >> it's going to be okay. >> your new season is going to be fantastic. >> starts january 21st. we're excited.
in production right now in brooklyn. >> i know you are, right around the corner from us. we're working you hard. >> we are working hard. >> but it's worth it. you have great stories to tell coming up this season. look forward to it very much. >> thanks. >> good to see you. >> you too. >> ty, up to you. >> thank you very much. year-end tax planning is upon us now. we have the best strategies to lower your tax bite and don't forget, those rates went up earlier this year. 2013. so you want to pay attention. apple launching its mini ipad as the tech giant kicks off a flu battle with samsung. what's at stake. you see apple shares up 77 cents. [ male announcer ] once, there was a man
who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. welcome back to "power lunch." i'm jewel julia boorstin. dish shares are trading higher on better than expected results and charlie earringen, company's chairman's comments. he says he does not rule out an
acquisition of t-mobile and cautiously optimistic dish will get a deal done with disney and says he's willing to walk away and not carry disney content but is hoping they will make a deal that will be a big win for both companies. ergen laid out his vision for video offerings down the line and transform the company as its core business slows. >> thank you very much. in today's yahoo! finance question of the day, the iea says the u.s. will surpass saudi arabia and russia to become the top oil producer by 2016. just three years from now. is the u.s. finally becoming energy independent? 27% of you say yes, it's about time. 34% say i'm skeptical if it will actually happen. 40% say we're making progress but we should be investing in alternative energy as well. let's see what's coming up on "street signs"? mandy? >> lots of things, ty. top of the hour, legendary elusive hedge fund billionaire
ken griffin of citadel giving a rare interview to cnbc. a not miss event. why herb says analysts are staying far away from twitter and we're also tracking the migration patterns of billionaires, yes apparently there is such a thing. all those things and lots more, guys, coming up top of the hour on "street signs." back to you on "power lunch." >> thanks very much, mandy. many families are beginning their year-end tax planning but some recent tax law changes could result in a larger tax bill from the irs. sharon epperson here now with some smart year-end tax tips to lower your tax bite. had hi. >> hi, tyler. it's very important to get a handle on your tax situation now, because what you got back from the irs or what you owed last year, could be a completely different story this time around and that's especially true for high-income taxpayers. starting this year those individuals with incomes over $400,000 or couples making over $450,000, are going to see themselves in a brand new much higher tax bracket, 39.6%.
that's up from 35% last year. they will be paying the maximum 20% tax rate on long-term capital gains and qualifying dividends. if your income is over $200 had,000, if you're an individual or $250,000 for a couple, you'll pay a 3.8% medicare tax on net investment income as well. so what can you do about all of this to minimize your tax bite in 2013? first thing is review your investments and elle sell those losers to offset capital gains. you can also defer your income if you're going to get a bonus or exercise stock options, wait until next year to exercise those options. by delaying that income you're not going to be paying taxes until 2014. and the other thing you want to do is make sure you max out your employer sponsored retirement plans. contributing to your 401(k), 403 b, 457 plan will lower your taxable income dollar for dollar
and those maximums are $17,500. for most individuals. those over 50, can contribute up to $23,000. and the other thing, of course, you definitely want to do is talk to financial professional because you want to make sure you take advantage of every tax-saving opportunity you can. now is the time to do it. sue, back to you. >> all right. thank you so much, sharon. don't forget to take your vitamins. why this $9 billion industry may be at risk. and it's being called the art auction of the century. christie's looking for a $500 million blockbuster. the chairman joins us for a rare interview right here on "power lunch."
this week in new york everybody is abuzz because there's about three quarters of a billion dollars worth of art to hit the auction block. the star is an andy warhol that could sell for $80 million. christie's is billing tonight's sale the auction of the century. $500 million total including that one painting that we are going to see in just a moment, perhaps fetching $100 million. christie's chairman brett gorvi in a rare interview joins us on "power lunch." brett, welcome. a pleasure to have you here. >> thanks for having us. >> you are standing in front of lot number 32, which is the francis bacon trip tick, three studies of lucy and fraeud.
this is the first time this will be auctioned off as one trip tick, is that correct? >> this is the first time it's really come to public market. it was bought in the '70s and to bring it to new york at a time when the market is at its highest is an incredible moment. we have very high expectations for the piece. >> where do you think most of the buying is going to come from? or can you even break it down for me at this point? is it going to be domestic, do you think, or is the international arena equally as enamored with contemporary art as it seems so many in the u.s. are? >> i think it's definitely a breakdown. one thing ate the contemporary art market it's a completely global market and we have seen in the last few sales very, very strong asian bidding, very, very strong russian bidding, very strong european, and the
americans have been winning as well. i would see a painting of this caliber brings out the top collectors and it's like a microcosm of the financial world. the titans of industry, the titans of commerce bidding against each other in really what will probably take five, six minutes see a painting make the highest price ever for a contemporary work of art. >> this is a trip tick and has it ever been sold as a transcri triptsic at auction? >> it hasn't. the highest price was achieved in 2008, when a painting sold for $86 million. this is coming at a much stronger part of the market, and frankly this is a 1969 painting, a portrait of lucian freud, a close friend of the artist francis bacon. it's a personal painting but hitting the market at the right
time, in a vale which is tremendous. this is one of the highlights of our sale, but we have a $500 million sale and last season, our sale made $495 million, which you the highest for a sale in any auction category in any history. so we are now starting, actually, the sale at a higher price point. >> let's move on to andy warhol's coca-cola, which i understand he did sign on the turning edge of that piece. i know there's a range on this painting, 40,000 to 60,000, maybe 65 -- >> $65 million. >> we are in the $40 million. >> i know. that just tells you where i can buy my art and it wouldn't unfortunately be at christie's. tell me where you think this is going to come in? >> the warhol market is as with the bacon market as with many of the artists we are showing tonight these are the blue chip
artists of our time and warhol has a fantastic trajectory, world-record prices achieved for him,$72 million for current artist, this is conservatively estimated and i would estimate it's probably going to sell high end of its estimate span, especially in the sale where, this is an icon market where people are really looking for the best of the best and if you are a new collector out of asia or the middle east or russia, these are the images which are immediately recognizable and these are the artists who are immediately recognizable. it's blue chip -- >> another potentially iconic whimscle item up for sale, the balloon dog attracting a lot of attention. looks like a tiny thing on our screen. it's ten feet high or more. that would be nice on your front lawn, wouldn't it? >> exactly. in fact, we've had it both
outside rockefeller here as well as in our building and it towered within our galleries. jeff kunz who is one of the most popular artists, he is a pop artist of our times, and this is, again, as with coca-cola, his icon. everyone who understands the work, understands this is really his most important work. and we would have seen his work if you went to the met, this was the balloon dog on the roof of the met. it was one of the most popular objects. it's been fantastic to see the public walk past this, there's been so many instagram images sent out that's gone viral and i think tonight, again, we're going to see -- >> my kids love it. >> he wanted, you know, from kunz's side this was an image of hope and inspiration and of happiness. >> all right. >> i think that's something else which our market is about. people are buying beauty and buying quality and they're buying very well because anything they buy tonight the value will increase. we're not anywhere near the
height of our market. >> mr. gorvey, hopeful words on your behalf. we appreciate your time today. >> all right. moving on, do you take vitamins every day? well the industry, the vitamin industry may be at risk. lots of public companies that trade and retail those substances. and today, starting at 3:00, live on the "closing bell" may ya will continue to bring you the latest from the schwab impact conference in washington and head to impact.cnbc.com for our coverage of top industry leaders and strategists. we'll be back right after this.
you really love, what would you do?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] i'd be an architect. what if i told you someone could pay you and what if that person were you? ♪ when you think about it, isn't that what retirement should be, paying ourselves to do what we love? ♪
do you take vitamins every day? it's a $23 billion a year industry but now may be facing some fresh risks. seema moody here with more details. what do you find? >> tyler, it's interesting, millions of americans take vitamins to stay healthy and live longer but it turns out they may not help. the u.s. preventative services task force found that there is not enough evidence to determine whether you can reduce your risk of cardios vascular disease or cancer by taking a multivitamin. experts we spoke to say this doesn't mean multivitamins are not helpful. >> multivitamin can fill those nutrient gaps and provide us with the essential nutrients we need. it's a good insurance policy. >> but madeleine fernstorm, professor at the university of pittsburgh school of medicine told nbc consumers should know taking vitamins does not offset poor lifestyle choices. thanks to an aging baby boomer population the vitamin and dietary supplement industry is a fast growing one according tos the monitor, it is expected to
become a $28 billion industry by 2017. drug and consumer giants have been taking notice of this growth. png and pfizer making acquisitions in the supplement industry space and gnc, herbal life, new skin enterprises have a significant footing in the vitamin and dietary supplement space. whethers these findings from the task force will impact demand for vitamins and analysts that i've spoken to so far don't think sales will be impacted at this point. >> here's vitamins for you. >> thank you very much. >> thank you very much. biggest stock winners of the day coming up next. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
maestro of project management. baron of the build-out. you need a permit... to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro. i'm a careful investor.
when you do what i do, you think about risk. i don't like the ups and downs of the market, but i can't just sit on my cash. i want to be prepared for the long haul. ishares minimum volatility etfs. investments designed for a smoother ride. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus, which includes investment objectives, risks, charges and expenses.
read and consider it carefully before investing. risk includes possible loss of principal. jo let's get you up to date on the dow jones industrial average which is a little on the negative side by about 50 points. the s&p down 7 and the nasdaq down 11. there are winners in an overall down market today. tenant health care on the upside by a good 4.3%. about a 4.25% for dr horton and marathon petroleum on the upside by just over 2.5%. the transports because of lower oil prices, ty, are now up 22 points on the trading session and the oil market as you know
is part of the reason for that. so are the airlines. the airlines have. pushing transports higher. the oil market is last traded on the downside by about 1% or so. so you're up to date. >> all right. sue, thanks very much. that will do it for another edition of "power lunch." thank you all so much for watching. >> have a great afternoon. "street signs" begins now. it is a big day on cnbc and we have a blockbuster hour on tap. live at the deal book conference for a rare, exclusive interview with billionaire hedge fund ken griffin. you cannot afford to miss that interview. are we at a market top or still time for you to get in? market all stars debate and another retailer heads to the front line in the war on thanksgiving. this one is also for the birs. robert franks has the new migratpa